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ScanSource Reports Fourth Quarter and Fiscal Year 2020 Results

GREENVILLE, S.C.–(BUSINESS WIRE)–ScanSource, Inc. (NASDAQ: SCSC), a leading provider of technology products and solutions, today announced financial results for the fourth quarter and fiscal year ended June 30, 2020. All results in this release reflect continuing operations only unless otherwise noted.

Fourth Quarter Summary:

  • Net sales: $636.5 million, down 22% year-over-year
  • Gross profit: $74.1 million, down 23% year-over-year
  • GAAP operating loss of $(113.4) million; non-GAAP operating income of $8.2 million
  • Net loss from continuing operations of $(108.9) million, which includes non-cash goodwill and asset impairment charges of $120.5 million
  • GAAP and non-GAAP diluted EPS of $(4.29) and $0.19 per share, respectively
  • Classified divestitures of products distribution business outside of the United States, Canada and Brazil (“Divestitures”) as assets held for sale at June 30, 2020 and reported as discontinued operations in the financial results
  • Generated strong operating cash flow of $74.0 million during the quarter

“While the COVID-19 pandemic had a significant impact on our quarterly financial results, I am proud of how our teams have executed and the value we deliver to our suppliers and customers,” said Mike Baur, Chairman and CEO, ScanSource, Inc. “We’ve taken the necessary actions to strengthen our balance sheet, improve our cost structure, and continue to drive investments in our higher-margin, VAR cloud platform and agency business.”

Quarterly Results

Net sales totaled $636.5 million for the fourth quarter of fiscal year 2020, down 22% year-over-year, or down 19% for organic growth. The reduction in net sales is primarily due to the impact of the COVID-19 pandemic, which resulted in lower demand from customers. For the Intelisys master agency business, net sales increased 15% year-over-year for the fourth quarter of fiscal year 2020.

For the fourth quarter of fiscal year 2020, operating income decreased to $(113.4) million, and non-GAAP operating income decreased to $8.2 million. As of the annual goodwill impairment test date of April 30th, the Company’s revenue projections were lowered, primarily as a result of the COVID-19 pandemic. As a result, the Company recognized pre-tax, non-cash goodwill and asset impairment charges of $120.5 million. This accounting adjustment does not involve any cash outflow.

On a GAAP basis, net income for the fourth quarter of fiscal year 2020 totaled $(108.9) million, or $(4.29) per diluted share, compared to net income of $16.0 million, or $0.62 per diluted share, for the prior-year quarter. Non-GAAP net income totaled $4.9 million, or $0.19 per diluted share, compared to $19.3 million, or $0.75 per diluted share, for the prior-year quarter.

At June 30, 2020, ScanSource had cash and cash equivalents of $29.5 million and total debt of $218.7 million for continuing operations. Borrowings for discontinued operations totaled $28.2 million. In the fourth quarter of fiscal year 2020, the Company generated $74.0 million of operating cash flow.

Full Year Results

For fiscal year 2020, net sales decreased 6% to $3.0 billion, or a 5% year-over-year decrease on an organic basis. Fiscal year 2020 GAAP operating income decreased to $(65.0) million, largely from the non-cash goodwill and asset impairment charges, and non-GAAP operating income decreased to $78.9 million.

On a GAAP basis, net income for fiscal year 2020 totaled $(79.2) million, or $(3.12) per diluted share, compared to net income of $64.9 million, or $2.52 per diluted share for the prior year. Non-GAAP net income totaled $52.0 million, or $2.05 per diluted share, compared to $87.7 million, or $3.41 per diluted share for the prior year.

Discontinued Operations

On August 20, 2019, ScanSource announced plans to divest its products distribution businesses outside of the United States, Canada and Brazil. ScanSource continues to operate in its digital distribution business in these geographies. These plans are part of a strategic portfolio repositioning to align investments with higher-growth, higher-margin businesses. On July 23, 2020, ScanSource signed an agreement to sell its products distribution business located in Mexico, Colombia, Chile, Peru and its Miami-based export operations to Intcomex. The Company is actively working on sales opportunities for its divestitures in Europe and the UK.

At June 30, 2020, the Divestitures were classified as assets held for sale and recorded as discontinued operations. Net loss from discontinued operations for the fourth quarter of fiscal year 2020 includes a $88.9 million non-cash loss on held for sale classification to establish a valuation allowance and $13.7 million for non-cash impairment charges.

COVID-19 Update

Our top priority during the COVID-19 pandemic is protecting the health and safety of our employees. We implemented travel restrictions and transitioned our employees, where possible, to a remote working environment. Nearly all office-based employees around the world are working remotely. We have taken a number of measures to ensure our teams have the flexibility and resources they need to stay safe and healthy. We are experiencing higher costs from these safety measures to protect our employees. We are continuing to provide the high level of customer service our partners expect from us.

Initiated Expense Reduction Plan

In July 2020, ScanSource initiated a $30 million annualized expense reduction plan to address the business impacts of the COVID-19 pandemic and prepare for the next phase of growth.

Webcast Details and CFO Commentary

At approximately 4:15 p.m. ET today, a CFO commentary, as a supplement to this press release and the Company’s conference call, will be available on ScanSource’s website, www.scansource.com (Investor Relations section). ScanSource will present additional information about its financial results in a conference call today, August 31, 2020, at 5:00 p.m. ET. A webcast of the call will be available for all interested parties and can be accessed at www.scansource.com (Investor Relations section). The webcast will be available for replay for 60 days.

Safe Harbor Statement

This press release contains “forward-looking” statements, including the Company’s Divestitures and the impact of the COVID-19 pandemic, which involve risks and uncertainties. Any number of factors could cause actual results to differ materially from anticipated results, including, but not limited to, the impact of the COVID-19 pandemic on our operations and financial condition, the Company’s ability to complete the Divestitures on acceptable terms or to otherwise dispose of the operations, changes in interest and exchange rates and regulatory regimes impacting the Company’s international operations, the impact of tax reform laws, the failure of acquisitions to meet the Company’s expectations, the failure to manage and implement the Company’s organic growth strategy, credit risks involving the Company’s larger customers and suppliers, termination of the Company’s relationship with key suppliers or a significant modification of the terms under which it operates with a key supplier, the decline in demand for the products and services that the Company provides, reduced prices for the products and services that the Company provides due both to competitor and customer action, changes in the Company’s operating strategy, and other factors set forth in the “Risk Factors” contained in the Company’s annual report on Form 10-K for the year ended June 30, 2020, filed with the Securities and Exchange Commission. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Information

In addition to disclosing results that are determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), the Company also discloses certain non-GAAP financial measures, which are summarized below. Non-GAAP financial measures are used to understand and evaluate performance, including comparisons from period to period. Non-GAAP results exclude amortization of intangible assets related to acquisitions, change in fair value of contingent consideration, acquisition costs, restructuring costs and other non-GAAP adjustments.

Net sales on a constant currency basis, excluding Divestitures and acquisitions: The Company discloses the percentage change in net sales excluding the translation impact from changes in foreign currency exchange rates between reporting periods and excluding the net sales from Divestitures, as well as acquisitions prior to the first full year from the acquisition date. This measure enhances the comparability between periods to help analyze underlying trends on an organic basis.

Income Statement Non-GAAP Metrics: To evaluate current period performance on a more consistent basis with prior periods, the Company discloses non-GAAP net sales, non-GAAP gross profit, non-GAAP operating income, non-GAAP other expense, net, non-GAAP pre-tax income, non-GAAP net income and non-GAAP diluted earnings per share (non-GAAP diluted “EPS”). Non-GAAP results exclude amortization of intangible assets related to acquisitions, changes in fair value of contingent consideration, acquisition and divestiture costs, impairment charges and other non-GAAP adjustments. Non-GAAP metrics are useful in assessing and understanding the Company’s operating performance, especially when comparing results with previous periods or forecasting performance for future periods.

Return on invested capital (“ROIC”): Management uses ROIC as a performance measurement to assess efficiency in allocating capital under the Company’s control to generate returns. Management believes this metric balances the Company’s operating results with asset and liability management, is not impacted by capitalization decisions and correlates with shareholder value creation. In addition, it is easily computed, communicated and understood. ROIC also provides management a measure of the Company’s profitability on a basis more comparable to historical or future periods.

ROIC assists management in comparing the Company’s performance over various reporting periods on a consistent basis because it removes from operating results the impact of items that do not reflect core operating performance. ROIC is calculated as adjusted EBITDA over invested capital. Adjusted earnings before interest expense, income taxes, depreciation and amortization (“Adjusted EBITDA”) excludes the change in fair value of contingent consideration, in addition to other non-GAAP adjustments. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period. Management believes the calculation of ROIC provides useful information to investors and is an additional relevant comparison of the Company’s performance during the year.

These non-GAAP financial measures have limitations as analytical tools, and the non-GAAP financial measures that the Company reports may not be comparable to similarly titled amounts reported by other companies. Analysis of results and outlook on a non-GAAP basis should be considered in addition to, and not in substitution for or as superior to, measurements of financial performance prepared in accordance with GAAP. A reconciliation of the Company’s non-GAAP financial information to GAAP is set forth in the Supplementary Information (Unaudited) below.

About ScanSource, Inc.

ScanSource, Inc. (NASDAQ: SCSC) is at the center of the technology solution delivery channel, connecting businesses and providing solutions for their complex needs. ScanSource sells through multiple, specialized routes-to-market with digital, physical and services offerings from the world’s leading suppliers of point-of-sale (POS), payments, barcode, physical security, unified communications and collaboration, telecom and cloud services. ScanSource enables its sales partners to create, deliver and manage solutions for end-customers across almost every vertical market. Founded in 1992 and headquartered in Greenville, South Carolina, ScanSource was named one of the Best Places to Work in South Carolina and on FORTUNE magazine’s 2020 List of World’s Most Admired Companies. ScanSource ranks #654 on the Fortune 1000. For more information, visit www.scansource.com.

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands)

 

 

June 30, 2020

June 30, 2019

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

29,485

 

$

19,305

 

Accounts receivable, less allowance of $21,906 at June 30, 2020 and $27,521 at June 30, 2019

 

443,185

 

 

523,424

 

Inventories

 

454,885

 

 

554,080

 

Prepaid expenses and other current assets

 

94,681

 

 

83,753

 

Current assets held for sale

 

181,231

 

 

296,753

 

Total current assets

 

1,203,467

 

 

1,477,315

 

Property and equipment, net

 

55,641

 

 

60,570

 

Goodwill

 

214,288

 

 

310,715

 

Identifiable intangible assets, net

 

121,547

 

 

121,214

 

Deferred income taxes

 

24,630

 

 

15,447

 

Other non-current assets

 

72,521

 

 

52,921

 

Non-current assets held for sale

 

 

 

29,079

 

Total assets

$

1,692,094

 

$

2,067,261

 

Liabilities and Shareholders’ Equity

 

 

Current liabilities:

 

 

Accounts payable

$

454,240

 

$

488,291

 

Accrued expenses and other current liabilities

 

76,686

 

 

64,629

 

Current portion of contingent consideration

 

46,334

 

 

38,393

 

Income taxes payable

 

5,886

 

 

3,956

 

Short-term borrowings

 

 

 

 

Current portion of long-term debt

 

7,839

 

 

4,085

 

Current liabilities held for sale

 

128,022

 

 

101,532

 

Total current liabilities

 

719,007

 

 

700,886

 

Deferred income taxes

 

3,884

 

 

 

Long-term debt, net of current portion

 

143,175

 

 

151,014

 

Borrowings under revolving credit facility

 

67,714

 

 

172,390

 

Long-term portion of contingent consideration

 

 

 

39,532

 

Other long-term liabilities

 

80,068

 

 

57,153

 

Long-term liabilities held for sale

 

 

 

32,157

 

Total liabilities

 

1,013,848

 

 

1,153,132

 

Commitments and contingencies

 

 

Shareholders’ equity:

 

 

Preferred stock, no par value; 3,000,000 shares authorized, none issued

 

 

 

 

Common stock, no par value; 45,000,000 shares authorized, 25,361,298 and 25,408,397 shares issued and outstanding at June 30, 2020 and June 30, 2019, respectively

 

63,765

 

 

64,287

 

Retained earnings

 

747,276

 

 

939,930

 

Accumulated other comprehensive loss

 

(132,795

)

 

(90,088

)

Total shareholders’ equity

 

678,246

 

 

914,129

 

Total liabilities and shareholders’ equity

$

1,692,094

 

$

2,067,261

 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Income Statements (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Quarter ended June 30,

 

Fiscal year ended June 30,

 

2020

 

2019

 

2020

 

2019

Net sales

$

636,450

 

 

$

811,432

 

 

$

3,047,734

 

 

$

3,249,799

 

Cost of goods sold

 

562,303

 

 

 

714,789

 

 

 

2,692,165

 

 

 

2,856,996

 

Gross profit

 

74,147

 

 

 

96,643

 

 

 

355,569

 

 

 

392,803

 

Selling, general and administrative expenses

 

58,192

 

 

 

62,923

 

 

 

260,139

 

 

 

252,948

 

Depreciation expense

 

3,304

 

 

 

2,952

 

 

 

13,033

 

 

 

12,028

 

Intangible amortization expense

 

4,946

 

 

 

4,542

 

 

 

19,953

 

 

 

17,893

 

Impairment charges

 

120,470

 

 

 

 

 

 

120,470

 

 

 

 

Change in fair value of contingent consideration

 

674

 

 

 

3,666

 

 

 

6,941

 

 

 

15,200

 

Operating (loss) income

 

(113,439

)

 

 

22,560

 

 

 

(64,967

)

 

 

94,734

 

Interest expense

 

2,497

 

 

 

3,851

 

 

 

12,224

 

 

 

13,162

 

Interest income

 

(3,199

)

 

 

(446

)

 

 

(5,826

)

 

 

(1,818

)

Other expense (income), net

 

213

 

 

 

22

 

 

 

411

 

 

 

(247

)

(Loss) Income before income taxes

 

(112,950

)

 

 

19,133

 

 

 

(71,776

)

 

 

83,637

 

Provision for income taxes

 

(4,091

)

 

 

3,137

 

 

 

7,451

 

 

 

18,778

 

Net (loss) income from continuing operations

 

(108,859

)

 

 

15,996

 

 

 

(79,227

)

 

 

64,859

 

Net loss from discontinued operations

 

(108,403

)

 

 

(4,418

)

 

 

(113,427

)

 

 

(7,262

)

Net (loss) income

$

(217,262

)

 

$

11,578

 

 

$

(192,654

)

 

$

57,597

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income from continuing operations per common share, basic

$

(4.29

)

 

$

0.62

 

 

$

(3.12

)

 

$

2.53

 

Net loss from discontinued operations per common share, basic

 

(4.28

)

 

 

(0.17

)

 

 

(4.47

)

 

 

(0.28

)

Net (loss) income per common share, basic

$

(8.57

)

 

$

0.45

 

 

$

(7.59

)

 

$

2.25

 

Weighted-average shares outstanding, basic

 

25,353

 

 

 

25,627

 

 

 

25,378

 

 

 

25,642

 

 

 

 

 

 

 

 

 

Net (loss) income from continuing operations per common share, diluted

$

(4.29

)

 

$

0.62

 

 

$

(3.12

)

 

$

2.52

 

Net loss from discontinued operations per common share, diluted

 

(4.28

)

 

 

(0.17

)

 

 

(4.47

)

 

 

(0.28

)

Net (loss) income per common share, diluted

$

(8.57

)

 

$

0.45

 

 

$

(7.59

)

 

$

2.24

 

Weighted-average shares outstanding, diluted

 

25,353

 

 

 

25,691

 

 

 

25,378

 

 

 

25,734

 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

Quarter ended June 30,

 

Fiscal year ended June 30,

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

 

Net (loss) income

$

(217,262

)

 

$

11,578

 

 

$

(192,654

)

 

$

57,597

 

Net loss from discontinued operations

 

(108,403

)

 

 

(4,418

)

 

 

(113,427

)

 

 

(7,262

)

Net (loss) income from continuing operations

 

(108,859

)

 

 

15,996

 

 

 

(79,227

)

 

 

64,859

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities of continuing operations:

 

 

 

 

 

 

 

Depreciation and amortization

 

8,743

 

 

 

8,321

 

 

 

35,328

 

 

 

33,652

 

Provision for doubtful accounts

 

222

 

 

 

(1,197

)

 

 

1,621

 

 

 

1,712

 

Share-based compensation

 

1,425

 

 

 

1,210

 

 

 

5,478

 

 

 

6,045

 

Impairment charges

 

120,470

 

 

 

 

 

 

120,470

 

 

 

 

Deferred income taxes

 

(10,714

)

 

 

(3,698

)

 

 

(12,193

)

 

 

(2,757

)

Change in fair value of contingent consideration

 

674

 

 

 

3,666

 

 

 

6,941

 

 

 

15,200

 

Contingent consideration payments excess

 

 

 

 

 

 

 

(3,050

)

 

 

(10,190

)

Other

 

125

 

 

 

98

 

 

 

502

 

 

 

350

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

Accounts receivable

 

57,562

 

 

 

(38,060

)

 

 

57,477

 

 

 

(5,490

)

Inventories

 

93,623

 

 

 

61,948

 

 

 

86,177

 

 

 

(85,862

)

Prepaid expenses and other assets

 

(2,903

)

 

 

(14,657

)

 

 

(13,880

)

 

 

(10,091

)

Other non-current assets

 

(12,534

)

 

 

(2,545

)

 

 

(13,563

)

 

 

(2,438

)

Accounts payable

 

(76,224

)

 

 

(5,622

)

 

 

(20,846

)

 

 

16,134

 

Accrued expenses and other liabilities

 

(1,992

)

 

 

6,118

 

 

 

11,239

 

 

 

2,377

 

Income taxes payable

 

4,334

 

 

 

2,873

 

 

 

(441

)

 

 

(7,469

)

Net cash provided by operating activities of continuing operations

 

73,952

 

 

 

34,451

 

 

 

182,033

 

 

 

16,032

 

Cash flows from investing activities of continuing operations:

 

 

 

 

 

 

 

Capital expenditures

 

188

 

 

 

4,093

 

 

 

(6,387

)

 

 

(5,797

)

Cash paid for business acquisitions, net of cash acquired

 

 

 

 

 

 

 

(48,921

)

 

 

(32,161

)

Net cash used in investing activities of continuing operations

 

188

 

 

 

4,093

 

 

 

(55,308

)

 

 

(37,958

)

Cash flows from financing activities of continuing operations:

 

 

 

 

 

 

 

Borrowings on revolving credit, net of expenses

 

477,446

 

 

 

458,522

 

 

 

2,085,918

 

 

 

2,061,090

 

Repayments on revolving credit, net of expenses

 

(539,732

)

 

 

(611,877

)

 

 

(2,190,595

)

 

 

(2,132,702

)

Borrowings on long-term debt, net

 

(938

)

 

 

150,000

 

 

 

(4,085

)

 

 

149,670

 

Repayments of finance lease obligations

 

(1,105

)

 

 

(166

)

 

 

(1,765

)

 

 

(662

)

Debt issuance costs

 

 

 

 

(1,096

)

 

 

 

 

 

(1,096

)

Contingent consideration payments

 

 

 

 

 

 

 

(35,482

)

 

 

(35,606

)

Exercise of stock options

 

 

 

 

 

 

 

754

 

 

 

1,509

 

Taxes paid on settlement of equity awards

 

 

 

 

 

 

 

(1,353

)

 

 

(1,406

)

Repurchase of common stock

 

 

 

 

(9,176

)

 

 

(6,078

)

 

 

(9,483

)

Net cash (used in) provided by financing activities of continuing operations

 

(64,329

)

 

 

(13,793

)

 

 

(152,686

)

 

 

31,314

 

 

ScanSource, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited), continued

(in thousands)

 

 

 

 

 

 

 

 

Cash flows from discontinued operations:

 

 

 

 

 

 

 

Net cash flows provided by (used in) operating activities of discontinued operations

 

2,235

 

 

 

(37,031

)

 

 

44,238

 

 

 

(43,159

)

Net cash flows (used in) provided by investing activities of discontinued operations

 

(35

)

 

 

(330

)

 

 

(77

)

 

 

(1,416

)

Net cash flows (used in) provided by financing activities of discontinued operations

 

(10,663

)

 

 

15,748

 

 

 

(3,921

)

 

 

32,917

 

Net cash flows provided by (used in) discontinued operations

 

(8,463

)

 

 

(21,613

)

 

 

40,240

 

 

 

(11,658

)

Effect of exchange rate changes on cash and cash equivalents

 

(1,489

)

 

 

280

 

 

 

(3,642

)

 

 

558

 

Increase (decrease) in cash and cash equivalents

 

(141

)

 

 

3,418

 

 

 

10,637

 

 

 

(1,712

)

Consolidated cash and cash equivalents at beginning of period

 

34,596

 

 

 

20,400

 

 

 

23,818

 

 

 

25,530

 

Consolidated cash and cash equivalents at end of period

 

34,455

 

 

 

23,818

 

 

 

34,455

 

 

 

23,818

 

Cash and cash equivalents of discontinued operations

 

4,970

 

 

 

4,513

 

 

 

4,970

 

 

 

4,513

 

Cash and cash equivalents of continuing operations

$

29,485

 

 

$

19,305

 

 

$

29,485

 

 

$

19,305

 

ScanSource, Inc. and Subsidiaries

Supplementary Information (Unaudited)

(in thousands, except percentages)

 

 

 

 

 

 

 

 

Non-GAAP Financial Information:

 

 

 

 

Quarter ended June 30,

 

Fiscal year ended June 30,

 

2020

 

2019

 

2020

 

2019

Return on invested capital ratio (ROIC), annualized (a)

 

4.0

%

 

 

11.2

%

 

 

7.5

%

 

 

12.1

%

 

 

 

 

 

 

 

 

Reconciliation of net income to EBITDA:

 

 

 

 

 

 

 

Net (loss) income from continuing operations (GAAP)

$

(108,859

)

 

$

15,996

 

 

$

(79,227

)

 

$

64,859

 

Plus: Interest expense

 

2,497

 

 

 

3,851

 

 

 

12,224

 

 

 

13,162

 

Plus: Income taxes

 

(4,091

)

 

 

3,137

 

 

 

7,451

 

 

 

18,778

 

Plus: Depreciation and amortization

 

8,743

 

 

 

8,321

 

 

 

35,328

 

 

 

33,652

 

EBITDA (non-GAAP)

 

(101,710

)

 

 

31,305

 

 

 

(24,224

)

 

 

130,451

 

Plus: Change in fair value of contingent consideration

 

674

 

 

 

3,666

 

 

 

6,941

 

 

 

15,200

 

Plus: Acquisition and divestiture costs

 

1,311

 

 

 

230

 

 

 

4,000

 

 

 

1,218

 

Plus: Restructuring costs

 

 

 

 

 

 

 

604

 

 

 

 

Plus: Impairment charges

 

120,470

 

 

 

 

 

 

120,470

 

 

 

 

Plus: Tax reform and settlement, includes interest income

 

(8,424

)

 

 

 

 

 

(10,744

)

 

 

 

Adjusted EBITDA (numerator for ROIC) (non-GAAP)

$

12,321

 

 

$

35,201

 

 

$

97,047

 

 

$

146,869

 

 

 

 

 

 

 

 

 

Invested Capital Calculation

 

 

 

 

 

 

 

Equity – beginning of the period

$

897,678

 

 

$

911,063

 

 

$

914,129

 

 

$

866,376

 

Equity – end of the period

 

678,246

 

 

 

914,129

 

 

 

678,246

 

 

 

914,129

 

Plus: Change in fair value of contingent consideration, net of tax

 

510

 

 

 

2,780

 

 

 

5,247

 

 

 

11,294

 

Plus: Acquisition and divestiture costs

 

1,311

 

 

 

230

 

 

 

4,000

 

 

 

1,218

 

Plus: Restructuring, net of tax

 

 

 

 

 

 

 

449

 

 

 

 

Plus: Impairment charges, net

 

114,398

 

 

 

 

 

 

114,398

 

 

 

 

Plus: Tax recovery, net

 

(6,247

)

 

 

(3,110

)

 

 

(8,001

)

 

 

(3,110

)

Plus: Impact of discontinued operations, net of tax

 

98,794

 

 

 

(16,557

)

 

 

98,794

 

 

 

(16,557

)

Average equity

 

892,345

 

 

 

904,268

 

 

 

903,631

 

 

 

886,675

 

Average funded debt(b)

 

337,973

 

 

 

355,932

 

 

 

390,709

 

 

 

329,473

 

Invested capital (denominator for ROIC) (non-GAAP)

$

1,230,318

 

 

$

1,260,200

 

 

$

1,294,340

 

 

$

1,216,148

 

 

 

 

 

 

 

 

 

(a) Calculated as earnings before interest expense, income taxes, depreciation and amortization (EBITDA), plus change in fair value of contingent consideration and other adjustments, annualized and divided by invested capital for the period. Invested capital is defined as average equity plus average daily funded interest-bearing debt for the period.

(b) Average funded debt, which includes both continuing and discontinued operations, is calculated as the average daily amounts outstanding on short-term and long-term interest-bearing debt.

Contacts

Gerald Lyons

Executive Vice President, Chief Financial Officer

ScanSource, Inc.

(864) 286-4854

– or –

Mary M. Gentry

Vice President, Treasurer and Investor Relations

ScanSource, Inc.

(864) 286-4892

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